In major shift, U.S. now exports more oil than it ships in

* Net exports of crude and fuel average 200,000 bpd last
week
* Net crude imports fall to 4 mln bpd, an all-time weekly
low
* Crude production holds at all-time high of 11.7 mln bpd
* U.S. surge in output comes as OPEC grapples with supply
worries
(Updates with closing prices)
By David Gaffen
Dec 6 (Reuters) - The United States last week exported more
crude oil and fuel than it imported for the first time on
record, according to data released on Thursday, the same day
OPEC ended a meeting without a decision to curb global output to
balance out the historic surge in U.S. supply.
When adding in all imports and exports of crude and refined
products, the U.S. exported a net 211,000 barrels per day for
the week through Nov. 30 – the first time that has happened,
according to U.S. Energy Department figures dating to 1973. That
was on the back of a jump in crude exports to a weekly record of
more than 3.2 million bpd.
"So when does the U.S. send a delegate to OPEC meetings?"
said Kyle Cooper, consultant at ION Energy in Houston. "It's
really quite amazing. I do think that will occur more and more
often in coming years."
The United States historically has been a heavy importer of
crude oil in part due to a four-decade ban on crude exports that
was lifted in late 2015 by then-President Barack Obama.
Petroleum exports until recently were dominated by products
like gasoline and diesel, but that has changed since the U.S.
shale revolution that has sped up drilling and extraction of
oil, helping boost overall U.S. production to a record 11.7
million bpd.
The data comes on the same day that the Organization of the
Petroleum Exporting Countries adjourned a meeting without
announcing a supply-cut agreement as it grapples with sinking
prices due in part to the surge in U.S. output that has upended
the global supply equation.
Crude inventories fell 7.3 million barrels last
week, the first drawdown since September, as net crude imports
hit a record low of 4 million bpd, the U.S. Energy
Information Administration said on Thursday.
U.S. crude prices have sagged almost a third since hitting a
four-year high near $76 a barrel in October. That was in part
due to concerns about oversupply coming to the fore again as
U.S. production rose in tandem with increased output from Saudi
Arabia and Russia. The three countries are the world's largest
producers of oil.
That has created a dilemma for Saudi-led OPEC, which wants
to maintain higher prices but avoid ceding more market share to
shale producers. On Thursday, OPEC adjourned its meeting in
Vienna, aiming to reach an agreement with Russia on Friday.
"It seems EIA has a habit of sending bad news to OPEC during
its Vienna meetings. In the past, it has been surging U.S.
production numbers. But this time was truly remarkable and
historic showing data for net crude imports as -211,000 bpd,"
said Joe McMonigle, analyst at Hedgeye in Washington.
U.S. crude production is expected to average more than 12
million bpd in 2019, according to the EIA, an increase of more
than 3 million bpd in 2016. Shale production surged in the early
part of the decade as companies started to use hydraulic
fracturing, or fracking, to extract oil in basins in Texas,
North Dakota and other states.
U.S. output rose to 9.7 million bpd in mid-2015, just shy of
the nation's all-time high set in 1970, but fell off when OPEC
flooded the world markets with supply to try to hinder the shale
industry. But OPEC was forced to curb output in 2016 as
oil-producing nations faced budget shortfalls, and as prices
recovered, shale's output accelerated.
"Every single month, every single year, we’re going to
become more of a global pie and that’s a part of the pie you
can’t control - it's completely different than the OPEC piece,"
said Bernadette Johnson, vice president in market intelligence
at Drillinginfo in Denver.
For the week, the United States also posted net exports of
4.2 million bpd of products like gasoline and diesel.
The weekly figures are subject to wide fluctuations,
however, so the sudden shift may be a temporary occurrence.
Andrew Lipow, president of Lipow Oil Associates in Houston, said
he was not surprised this happened in the winter, a seasonally
slow period for domestic gasoline demand.
U.S. oil prices ended Thursday lower, due to concern that
planned OPEC production cuts will be smaller than originally
anticipated. U.S. crude futures lost 2.7 percent on the
day, while Brent crude dropped by 2.4
percent.
(Reporting by David Gaffen; additional reporting by Scott
DiSavino; editing by Marguerita Choy)
First Published: 2018-12-06 18:55:06
Updated 2018-12-06 21:50:30

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